Markets under pressure as geopolitical tensions escalate, Fed signals caution

SOUTH African markets traded on the backfoot on Thursday on the back of geopolitical risks arising from the war in the Middle East and the US Federal Reserve (Fed) revised down its growth forecasts for the US.

- SIPHELELE DLUDLA

The rand fell 0.6% to R18.12 against the US dollar during early morning trade but still remained above the R18-mark by late afternoon while the JSE All Share Index eased by 0.2% to 94 785 points.

The markets have remained on edge across the world as the war between Israel and Iran has intensified, pushing global oil prices to their highest in four months.

An Iranian missile barrage left at least 240 people wounded as they struck several sites across Israel, damaging a hospital in the country's south while targeting a military site. Israel also attacked Iran's Arak heavy water nuclear reactor as the two countries traded fire for a seventh consecutive day.

The war in the Middle East saw the Brent crude oil price rising 1.7% above $78 per barrel on Thursday as the main concern for the oil market remains the Strait of Hormuz, a vital route for a fifth of global crude.

Oil prices are now trading nearly 9% higher since Israel's initial strikes on Iran, with energy markets increasingly pricing in the chance of deeper supply disruptions.